Bookkeeping Tips for New Franchisees
When you buy a franchise, you become responsible for managing the financial records of your business. You also need to comply with both brand requirements and legal regulations. It can be a lot. One of the requirements may be having a bookkeeper manage the financial recordkeeping. Some bookkeeping companies specialize in working with franchises – BookWerksTM is one them. With so much experience in the franchise world, we are the go-to outsourced bookkeeping company for many franchise owners.
Here are some things to keep in mind as you are getting started:
Open a Separate Account for your Franchise
You don’t want to mix personal and business finances. Open a dedicated business bank account for all transactions pertaining to your franchise.
Use Accounting Software
Your franchisor may have a recommendation, or, if they use an outside bookkeeping service like BookWerksTM, may require you to use a cloud-based system such as Xero or QuickBooks. Everyone in the brand using the same system helps the franchisor maintain consistency, create reports and compare performance between franchises.
Follow Your Brand’s Guidelines
Most franchisors provide bookkeeping and financial reporting guidelines and procedures for franchisees to follow. Staying in compliance with your franchise agreement with keep your relationship productive.
If you are new to running a business, be sure to ask questions if there is anything you don’t understand. Or call us—here at BookWerksTM, we are always happy to help new franchisees.
We can help you use your Profit and Loss Statement, Balance Sheet and Case Flow Statement to make informed business decisions and have helpful discussions with your franchisor.
Track Your Royalties and Fees Carefully
Again, this is part of your franchise agreement and must be followed to the letter to stay on the good side of your brand. Attend to royalties religiously to make sure your numbers are accurate and you don’t get behind. Your franchisor may give you a template or specific instructions for reporting these expenses.
Our virtual bookkeeping service works with many franchises, helping franchisors and franchisees work together for precise financial recordkeeping. When we are hired by a brand, we become part of your team to streamline bookkeeping.
Budget
From the start, set a budget and stick to it. A regularly-revised financial forecast can be critical to financial planning and decision-making.
Keep Accurate Sales Records
Record all sales, including daily or weekly sales reports. Some franchises use Point-of-Sale (POS) systems that automate this process.
Track all Expenses
Whether you use an automated or manual system, keep detailed records of all business expenses, including
- Rent,
- Utilities,
- Payroll,
- Supplies,
- Marketing
and all other costs of running your business. As a client of our bookkeeping company, your expenses are automatically recorded in the cloud and available to you at all times.
Implement an Inventory Management System
Your franchisor can help with this. If you regularly reconcile your inventory levels, your financial reporting will be more accurate.
Reconcile Your Financial Accounts at Least Monthly
Review your bank and credit card statements regularly to make sure there are no errors or discrepancies.
Collect and Remit Sales Tax if Required
Complying with all tax regulations and deadlines at the local, state and federal levels is imperative.
Get Help as Needed
If any training or workshops are offered by your franchisor related to bookkeeping and financial management, take advantage of these opportunities! You will be better able to stay up on the franchisor’s expectations for a successful partnership.
If your franchisor’s requirements are complex, and they do not have an existing relationship with a bookkeeper you can use, consider outsourcing your bookkeeping.
Be sure the company you choose has franchise bookkeeping experience.
Knowing your business’s financial health at all times is necessary in order to make changes when they can make a difference. Accurate and timely bookkeeping will help you meet your obligations the brand, and make informed decisions to help you grow within the franchise system.